The U.S. Postal Service is in Worse Shape Than You Think

4 years 10 months 2 weeks ago Friday, November 29 2013 Nov 29, 2013 Friday, November 29, 2013 8:17:00 PM CST November 29, 2013 in News
By: Andie Lowenstein, KOMU 8 Reporter
loading

COLUMBIA - As Americans have traded "snail mail" for digital mail the U.S. Postal Service may be in even worse shape than we think.

"From 2007 to 2012 we've seen a $3 billion decrease in revenue with first-class mail volume," said Cheryl Thompson, a U.S. Postal Service Customer Relations Coordinator in Columbia. "We project to see $6.2 billion from 2012 to 2017."

Almost every category of mail, ranging from personal letters to bill payments, has eroded, as shown by a survey released earlier this month by The Heritage Foundation based on USPS numbers. After steadily rising for decades, first-class mail volume hit its peak in 2001 at 103.7 billion pieces. By 2012, it dramatically decreased to 69 billion, the same level as it was in 1984.

The study is by James Gattuso, senior research fellow for regulatory policy at the Heritage Foundation and a former contributor to Bloomberg Government. "Since 1987, the number of such letters received per household has plummeted 80 percent," Gattuso wrote in the study. "The total volume of such mail has declined by 25 percent since 2010 alone."

In May, the USPS published a news release saying it ended the second quarter of its 2013 fiscal year (Jan. 1 - March 31) with a net loss of $1.9 billion. It went on to explain that if Congress doesn't provide the U.S. Postal Service with a workable business model to suit today's marketplace, the agency may continue to face large quarterly financial losses. The Postal Service needs to save $20 billion annually by 2016.

The expansion of e-commerce and flourishing marketing campaigns has increased the Postal Service Shipping and Package business. Shipping and packaging revenue in the second quarter increased by $267 million, or 9.3 percent, compared to the same period last year.

The Heritage Foundation survey data shows "from 2009 to 2012, the total number of packages delivered by the USPS has grown by over 7 percent. Package delivery, however, still generates only about 20 percent of the USPS's total revenue, and in the overall package delivery business, the Postal Service is a minor player, with about 8 percent of the market, compared to 60 percent for UPS and 30 percent for FedEx."

The Senate Homeland Security and Governmental Affairs Committee is considering a bipartisan proposal to stabilize the agency's finances, which includes changing the calculating methods of retiree health care costs.

"Establishing a USPS-sponsored health care program, independent of the Federal Employees' Health Benefits Program (FEHBP), represents approximately $8 billion of annual savings," says Thompson. "The plan would reduce health care costs and yield equivalent or better coverage for the vast majority of employees and retirees."

House Oversight Committee Chairman Darrell Issa introduced a bill in July that on top of easing healthcare prefund payments would cut Saturday delivery of first class mail and completely eliminate door-to-door delivery. However, many lawmakers and postal worker unions have resisted the changes because it may be inconvenient for customers. Under the bill, door-to-door service for new residential and business addresses would shift to less costly curbside and cluster box delivery.

The bill would end Saturday mail delivery in a year. According to USPS, ending Saturday mail delivery would save $2 billion each year. "I do think we could do without Saturday delivery," Columbia resident Mel West said. "That wouldn't trouble too many persons."

The Carper-Coburn plan, introduced by Senate Homeland Security and Governmental Affairs Committee Chair Tom Carper and Ranking Committee Republican Tom Coburn, would allow the Postal Service to begin shipping alcoholic beverages.

"Other private shipping companies are able to deliver alcoholic beverages but the postal service is prohibited by law," Thompson said. "So I'm hoping that with the new legislation they will allow us the ability to mail as well to be more competitive."

The Postal Service is currently evaluating whether both the Senate and House bills would enable it to save the $20 billion it needs by 2017.

More News

Grid
List
CALLAWAY COUNTY - The man killed in a helicopter crash east of Fulton on Wednesday has been identified as Charles... More >>
5 hours ago Wednesday, October 17 2018 Oct 17, 2018 Wednesday, October 17, 2018 8:14:00 PM CDT October 17, 2018 in News
GASCONADE COUNTY - A school in Gasconade County went on lockdown on Wednesday after a juvenile threatened to self-harm nearby,... More >>
6 hours ago Wednesday, October 17 2018 Oct 17, 2018 Wednesday, October 17, 2018 7:39:00 PM CDT October 17, 2018 in News
COLUMBIA - The Columbia City Council approved a request on Monday to change the zoning of nearly 50 properties in... More >>
7 hours ago Wednesday, October 17 2018 Oct 17, 2018 Wednesday, October 17, 2018 6:33:00 PM CDT October 17, 2018 in News
JEFFERSON CITY- Andy Neidert's building on the corner of East High Street and Madison Street has been collapsing and held... More >>
9 hours ago Wednesday, October 17 2018 Oct 17, 2018 Wednesday, October 17, 2018 3:47:00 PM CDT October 17, 2018 in News
PANAMA CITY, Fla. - A former Missouri woman, now living in Florida's panhandle, said Wednesday she is experiencing the "catastrophic"... More >>
10 hours ago Wednesday, October 17 2018 Oct 17, 2018 Wednesday, October 17, 2018 3:41:00 PM CDT October 17, 2018 in News
COLUMBIA - Claire McCaskill's office has responded to a investigative piece by Project Veritas,which focuses on her campaign office. ... More >>
10 hours ago Wednesday, October 17 2018 Oct 17, 2018 Wednesday, October 17, 2018 3:24:00 PM CDT October 17, 2018 in News
(CNN) -- A white woman has been fired after video emerged of her confronting and blocking the entry of a... More >>
10 hours ago Wednesday, October 17 2018 Oct 17, 2018 Wednesday, October 17, 2018 3:23:00 PM CDT October 17, 2018 in News
JEFFERSON CITY – Robert Pinhero created a GoFundMe page and is recruiting drivers to help get voters without a car... More >>
10 hours ago Wednesday, October 17 2018 Oct 17, 2018 Wednesday, October 17, 2018 2:58:00 PM CDT October 17, 2018 in News
Cole County – From oil-dripping trucks to ones without seatbelts, Cole County Fire District officials say there's a pressing need... More >>
11 hours ago Wednesday, October 17 2018 Oct 17, 2018 Wednesday, October 17, 2018 2:38:00 PM CDT October 17, 2018 in News
KINGDOM CITY - Eight people were arrested after the Callaway County Sherrif's Office found 3.5 pounds of methamphetamine, about one... More >>
11 hours ago Wednesday, October 17 2018 Oct 17, 2018 Wednesday, October 17, 2018 2:23:00 PM CDT October 17, 2018 in News
(CNN) -- At least 92 people in 29 states have been infected with a strain of multidrug-resistant salmonella after coming... More >>
12 hours ago Wednesday, October 17 2018 Oct 17, 2018 Wednesday, October 17, 2018 1:11:43 PM CDT October 17, 2018 in News
JEFFERSON CITY (AP) — In ads and speeches, Democratic U.S. Sen. Claire McCaskill is pounding Missouri voters with a single... More >>
13 hours ago Wednesday, October 17 2018 Oct 17, 2018 Wednesday, October 17, 2018 12:19:00 PM CDT October 17, 2018 in News
JEFFERSON CITY - A multi-vehicle crash sent one man to the hospital with injuries right before the Wednesday morning commute.... More >>
14 hours ago Wednesday, October 17 2018 Oct 17, 2018 Wednesday, October 17, 2018 11:42:00 AM CDT October 17, 2018 in News
JEFFERSON CITY- The man prosecutors accused of killing Lincoln University student Charon Session pleaded not guilty Wednesday morning. About... More >>
14 hours ago Wednesday, October 17 2018 Oct 17, 2018 Wednesday, October 17, 2018 10:54:00 AM CDT October 17, 2018 in Top Stories
COLUMBIA (AP) — The University of Missouri had to toss out giving its Nobel Prize winning scientist a parking space... More >>
15 hours ago Wednesday, October 17 2018 Oct 17, 2018 Wednesday, October 17, 2018 10:24:00 AM CDT October 17, 2018 in Top Stories
DES MOINES, Iowa (AP) — No winning lottery ticket was sold for the latest Mega Millions drawing, meaning the estimated... More >>
15 hours ago Wednesday, October 17 2018 Oct 17, 2018 Wednesday, October 17, 2018 10:14:00 AM CDT October 17, 2018 in News
COLUMBIA - The Columbia Police Department is looking for a suspect after an armed robbery at a convenience store in... More >>
16 hours ago Wednesday, October 17 2018 Oct 17, 2018 Wednesday, October 17, 2018 9:32:00 AM CDT October 17, 2018 in Top Stories
COLUMBIA- A new mobile pantry location through The Food Bank for Central and Northeast Missouri will open Wednesday afternoon providing... More >>
19 hours ago Wednesday, October 17 2018 Oct 17, 2018 Wednesday, October 17, 2018 6:27:00 AM CDT October 17, 2018 in Top Stories
Columbia, MO
Broken Clouds 45°
2am 41°
3am 40°
4am 39°
5am 38°